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UNCLAS TEL AVIV 001611 
 
STATE FOR NEA, NEA/IPA, NEA/PPD 
 
WHITE HOUSE FOR PRESS OFFICE, SIT ROOM 
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HQ USAF FOR XOXX 
DA WASHDC FOR SASA 
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COMSOCEUR VAIHINGEN GE FOR PAO/POLAD 
COMSIXTHFLT FOR 019 
 
JERUSALEM ALSO ICD 
LONDON ALSO FOR HKANONA AND POL 
PARIS ALSO FOR POL 
ROME FOR MFO 
 
SIPDIS 
E.O. 12958: N/A 
TAGS: OPRC KMDR IS
 
SUBJECT: ISRAEL MEDIA REACTION 
 
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SUBJECTS COVERED IN THIS REPORT: 
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Mideast 
 
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Key stories in the media: 
------------------------- 
 
All media highlighted what many of them call a Qfrontal 
confrontationQ between PM Benjamin Netanyahu and President Barack 
Obama over the planned construction of some 20 apartments for Jewish 
residents in the Shepherd Hotel, in East Jerusalem's Sheikh Jarrah 
neighborhood.  Media reported that the State Department summoned 
IsraelQs new Ambassador to the U.S. Michael Oren.  HaQaretz also 
reported that local British diplomats have recently asked their U.S. 
colleagues to pressure Israel to cancel planned work at the site. 
HaQaretz reported that American sources have informed both Israel 
and the PA that the U.S. views East Jerusalem as no different than 
an illegal West Bank outpost with regard to its demand for a freeze 
on settlement construction.  The U.S. has demanded that the project 
be halted, but during yesterdayQs cabinet meeting, PM Benjamin 
Netanyahu noted that "Israel will not agree to edicts of this kind 
in East Jerusalem."  "United Jerusalem is the capital of the Jewish 
people in the State of Israel, and our sovereignty over the city is 
not subject to appeal," he continued.  "Our policy is that Jerusalem 
residents can purchase apartments anywhere in the city. This has 
been the policy of all Israeli governments.  There is no ban on 
Arabs buying apartments in the west of the city, and there is no ban 
on Jews building or buying in the city's east.  This is the policy 
of an open city.Q The media quoted Netanyahu as saying that the U.S. 
has crossed a red line, especially after he told the President that 
he will not make concessions on Jerusalem.  Major media reported 
that Netanyahu told the cabinet that he was QsurprisedQ by U.S. 
pressure over the East Jerusalem project.  The Jerusalem Post 
reported that senior Israeli diplomatic officials told the daily 
yesterday that JerusalemQs decision to leak to the media U.S. 
displeasure at the plan to build the apartments in East Jerusalem 
was designed to clarify to the Americans that construction in the 
capital should not be lumped together with any limitations Israel 
may agree to on building in the settlements.  Maariv quoted an 
Israeli diplomat as saying that U.S.-Israel relations are Qbleak and 
devoid of trust. 
Yediot (Shimon Shiffer) reported that, following NetanyahuQs 
statements, a senior source in the State Department said to the 
newspaper: QWe expect all parties to honor their commitments, and 
this means that Israel has to stop construction in sensitive areas, 
including East Jerusalem.  The President and the Secretary of State 
have made this clear to the Israeli government both publicly and 
privately.  This kind of activity has to stop.  Our policy on the 
matter of Jerusalem has not changed.  The status of Jerusalem will 
be determined in the negotiations on a final status arrangement. 
This has been agreed upon by Israel and the Palestinians.Q  Shiffer 
also cited the belief sources close to the PM that in the past few 
weeks, the U.S. administration has lost the momentum with which it 
embarked on solving the worldQs problems and the intricate Middle 
East issues.  Yediot quoted senior sources in NetanyahuQs bureau as 
saying that ObamaQs Cairo speech does not lead to creating a 
different reality. 
 
The Jerusalem Post and Israel Radio quoted Secretary of State 
Hillary Clinton as saying in Delhi yesterday that the U.S. 
administration is trying to reach an agreement with Israel on 
settlements. 
 
Yesterday Yediot reported that officials in Washington have reached 
the conclusion that if they want to move forward with the peace 
process, it would be better to apply pressure on Jerusalem rather 
than on the Palestinians to start the final-status negotiations as 
quickly as possible.   According to the newspaper, Special Envoy 
George Mitchell intends to present a timetable for the resumption of 
the talks during his upcoming visit.  Yesterday Maariv reported 
that, in light of the chilly relations between Israel and the U.S., 
Mitchell has put off his arrival in Israel, which had been scheduled 
for today, until next Monday. 
 
Maariv reported that U.S. National Security Advisor General James 
Jones is expected to visit Israel but that he will not discuss the 
settlement issue. 
 
As Defense Secretary Robert Gates is expected to arrived in Israel 
next week for talks on TehranQs nuclear program, The Jerusalem Post 
reported that a senior U.S. defense official has told the daily that 
an Israeli strike on Iran could be profoundly destabilizing and 
would affect U.S. interests.  The official reportedly warned that 
Israel needed to take its relationship with America into account in 
contemplating any such attacks. 
Israel Radio quoted the East Jerusalem daily Al-Quds as saying, 
based on Washington sources, that the U.S. administration might let 
Israel build hundreds of housing units in the settlements in 
exchange for Israeli recognition of permanent borders to be 
determined by the administration.  Al-Quds reportedly wrote that the 
administration wants mandatory referenda on the issue to be held in 
Israel and the PA. 
 
The media reported that yesterday, in a briefing to the cabinet 
meeting, Shin Bet head Yuval Diskin dismissed HamasQs endeavor to 
appear more moderate.  HaQaretz and other media reported that PM 
Netanyahu rebuked Diskin for commenting on political issues. 
 
The Jerusalem Post reported that, Qin what could be the largest 
one-time easing of restrictions on Palestinians,Q the IDF is 
considering a list of gestures ahead of Ramadan, including the 
removal of over 100 dirt roadblocks throughout the West Bank. 
Yesterday the newspaper reported that Obama administration officials 
have praised Netanyahu for steps he has taken to ease the condition 
of Palestinians. 
 
Leading media quoted former PM Ehud Olmert as saying in a Washington 
Post op-ed piece that the U.S.-Israeli understandings on settlements 
were a prerequisite for the Annapolis process and that the U.S. 
focus on the issue is Qnot useful. 
 
Yesterday The Jerusalem Post reported that Ambassador Michael Oren 
is reaching out to the Jewish Left. 
 
The Jerusalem Post quoted Claude Gueant, Secretary-General of the 
Elysee Palace, as saying yesterday on the French radio station 
Europe 1 that Syrian President Bashar Assad has promised to secure 
the release of Gilad Shalit. 
 
The media reported that yesterday the Ministerial Committee for 
Legislation passed a revised bill for the so-called Nakba Law, which 
calls for prohibiting government bodies from funding any activity 
that could undermine the foundations of the state or contradict its 
basic values.  The original bill banned individuals from marking 
Israel's Independence Day as a day of mourning or sadness.  Had that 
bill passed, offenders could have been imprisoned for up to three 
years. 
 
HaQaretz reported that Kadima Knesset Member Shaul Mofaz is 
positioning himself to challenge his partyQs chair Tzipi Livni again 
for the leadership of his party. 
 
Yediot reported that Swiss FM Micheline Calmy-Rey told AFP that 
Hamas is a key player in the Middle East and that it cannot be 
ignored. 
 
The Jerusalem Post reported that a Judea and Samaria [i.e. West 
Bank] Police source told the newspaper yesterday that police have 
carried out a wide-ranging probe into suspicions that the World 
Zionist OrganizationQs Settlement Division Department illegally 
transferred Palestinian-owned land to the veteran Ofra settlement. 
HaQaretz carried a similar story. 
 
HaQaretz reprinted a Daily Forward article on an anti-Semitic speech 
to the convention of the Islamic Society of North America, which has 
QmarredQ interfaith endeavors. 
 
Yesterday HaQaretz quoted a GOI source in Jerusalem as saying that 
UNIFIL had precise information bout an explosives cache that 
exploded in a southern Lebanese village last Tuesday and about a 
number of other installations where Hizbullah is storing rockets, 
but that UNIFIL had done nothing about it. The Jerusalem Post 
reported that, ahead of the renewal of UNIFILQs mandate this summer, 
the Defense Ministry is hoping that the UN will issue new rules of 
engagement for the peacekeeping force that will enable it to search 
Lebanese villages without prior coordination with the Lebanese Armed 
Forces. 
 
The Jerusalem Post reported that yesterday senior PA negotiator Saeb 
Erekat played down a recent meeting with Iranian FM Manouchehr 
Mottaki in Sharm el-Sheikh.  The newspaper cited the GOIQs anger 
over the meeting. 
 
Maariv reported that the Beersheva District court sentenced a 
15-year-old would-be suicide bomber from Beit Hanun (northern Gaza) 
to 10 yearsQ imprisonment. 
 
The Jerusalem Post reported that yesterday Dov Weisglass, bureau 
chief of former PM Ariel Sharon, firmly denied allegations raised 
last week by estranged senior PLO figure Farouk Qaddoumi that Sharon 
and PA President Mahmoud Abbas conspired to kill Yasser Arafat.  The 
newspaper reported that yesterday the PA announced that Al 
Jazeera-TV would be allowed to resume works in the West Bank.  The 
station had broadcast QaddoumiQs allegations. 
E 
Leading media reported that an organization of Iraqi Jews in Israel 
is organizing QrootsQ trips to northern Iraq.  Yesterday Yediot 
reported that an Al-Qaida Web site has threatened would-be Israeli 
tourists. 
 
HaQaretz cited data collected over the past two weeks by the NGO 
Hotline for Migrant Workers that, out of 221 people who appeared 
before the custody tribunal after being detained over the past two 
weeks by the Immigration Authority's Oz unit, 65 percent are 
asylum-seekers from Sudan and Eritrea who cannot be deported and 
have been released by the tribunal judge.   The figures reportedly 
show that another 16 percent of those detained came to Israel 
legally and lost their residency status because they left their 
employer.  These figures contrast with statements by the Oz unit 
that it detains only illegal residents, and holds refugees with 
proper documentation only in order to take them to the area where 
they are permitted to live, beyond the central coastal plain 
region. 
 
The media quoted Attorney-General Menachem Mazuz as saying that 
former Shas leader Aryeh Deri may have to wait for another year 
until he can return to politics. 
 
Maariv and The Jerusalem Post reported that yesterday Israel 
extradited Micky Louis Mayon, an American citizen who is wanted for 
many federal crimes, among them membership in the Ku Klux Klan, 
burning federal judges' cars, and several other charges of severe 
violence. 
 
All media reported that Meir Amit, who headed IDF Intelligence and 
Mossad in the Q60s and served as a centrist cabinet minister in the 
Begin government in the late Q70s, died on Friday at the age of 88. 
 
The media mark 40 years of the Apollo 11 moon landing. 
 
-------- 
Mideast: 
-------- 
 
Block Quotes: 
------------- 
 
¶I.  "His Jerusalem" 
 
Senior columnist Nahum Barnea wrote on page one of the 
mass-circulation, pluralist Yediot Aharonot (7/20): QTorn between 
the pressures from Washington and the pressures from the right wing 
branch of his party and his coalition, Netanyahu chose the easy 
solution: Jerusalem.  Like then, in the Western Wall tunnel affair, 
he thinks that the magic word QJerusalemQ will rally behind him not 
only the right wing in Israel, but also the political center in 
Israel, a majority of U.S. Jewry and a majority of the members of 
Congress.  In other words: He wishes to divert the clash with the 
Obama administration from the question of construction in the 
settlements, where he does not enjoy real support, either here or 
there, to a more convenient playing field.  This could have been 
brilliant if it were not so transparent.... The blame for the 
deterioration [in U.S.-Israeli relations] can be pinned on the 
statements made by Obama and Clinton.  It can be pinned on the 
statements made by Netanyahu and Lieberman.  The question of who is 
to blame is less important than the question of what should be done 
now.  Netanyahu gave the signal yesterday: The clash is to be 
escalated.  In two or three weeks, when he becomes alarmed and wants 
to get down from his high horse, he will discover that the guys from 
the Likud are waiting for him below. 
 
II.  "Taking the Offensive" 
 
Diplomatic correspondent Ben Caspit wrote on page one of the 
popular, pluralist Maariv (7/20): QAfter four months of playing 
defense, Benjamin Netanyahu took the offensive yesterday for the 
first time.  Until now, it was a one-sided game.  Suddenly, for a 
moment, it looks balanced.... NetanyahuQs move yesterday was a wise 
tactical move.  Obama backed him into a corner with the settlements? 
 So Netanyahu, with a maneuver of his own, takes him into the 
opposite corner, with Jerusalem.  Just as the settlements are a 
consensus in the U.S. and around the world, Jerusalem is a consensus 
in Israel and within the Jewish people. 
 Finally, something that is truly worth fighting over.  Both of 
them, Obama and Netanyahu, now hold each other by a sensitive place. 
 Now we will see whether Obama is a real man -- whether he really 
intends to take this to the end.  The question is what we will do if 
we find, disastrously, that Obama is serious, that he will take it 
to the end.  In this case, this may be the end of us.... Netanyahu 
is playing poker with Obama without a real hand.  He is merely 
playing with the semblance of one.  It takes a great deal of courage 
and composure to manage such a crisis.  Until now, Netanyahu has not 
conducted the crisis wisely.  He identified it belatedly, responded 
belatedly, folded and buried his head in the sand. 
III.  "Playing with Fire" 
 
The independent, left-leaning Ha'aretz editorialized (7/20): QU.S. 
President Barack Obama's opposition should not have surprised 
Netanyahu [regarding construction in East Jerusalem].... Jerusalem 
is one of the most sensitive issues in the Israeli-Arab conflict. 
Particularly infuriating is the government's claim that Israel is 
allowing the Arabs of East Jerusalem to settle in Jewish 
neighborhoods.... Construction for Jews in East Jerusalem is 
inflicting tremendous diplomatic damage on Israel. Netanyahu and 
Jerusalem mayor Nir Barkat are playing with fire under the 
transparent cover of "normal authorization for private 
construction." Freezing construction at Shepherd Hotel is no less 
essential than evacuating the outposts and freezing settlement 
construction beyond the capital's municipal area. 
 
IV.  "Forget Jerusalem" 
 
Political commentator Shalom Yerushalmi wrote in Maariv (7/20): 
QLarge peripheral neighborhoods [of East Jerusalem] can be conceded 
and handed over to Palestinian sovereignty, but since the entire 
peace process is treading water, Jewish construction will yet reach 
there too and render even this partitioning impossible.  In the 
situation that has arisen, Jews cannot be evacuated from the Arab 
neighborhoods, and the same is true for Arabs who have bought houses 
by various means in Jewish neighborhoods.  All the right wing 
parties -- Likud, Yisrael Beiteinu, Shas, United Torah Judaism, the 
National Union, and the Jewish Home -- are adamantly opposed to 
partitioning Jerusalem.  Yesterday, Kadima Knesset Member Yoel 
Hasson told me: QJerusalem cannot be partitioned, even at the cost 
of not having an agreement with the Palestinians.Q  We are left with 
parts of the Labor Party, Meretz, and the Knesset members from the 
Arab parties, who support partitioning the city.  The meaning is 
clear: On the topic of Jerusalem, the U.S. is getting into a 
confrontation with a majority of the public in Israel.  Whoever 
dreams of peace under these conditions can continue to dream. 
 
¶V.  QJust Because He Can 
 
The nationalist, Orthodox Makor Rishon-Hatzofe editorialized (7/20): 
QU.S. President Barack Obama is going on with the foreign policy he 
initiated when he was sworn in. There is a global problem called 
the Israeli settlements in Judea and Samaria [i.e. the West Bank]. 
Nothing else will directly determine the future of the world, for 
good and for evil. It isnQt Barack Obama who is to blame alone.  In 
this situation, it is Israel, which has long lost its military 
deterrence and its diplomacy; it is a doormat trodden upon by 
friends and foes alike.  In the Middle East -- Obama learned this 
very quickly -- it pays to join the camp of the strong.  Israel has 
long been left out of that camp. 
 
VI.  QWho Is a Self-Hating Jew? 
 
Senior op-ed writer Akiva Eldar commented in the independent, 
left-leaning Ha'aretz (7/20): QAny child knows that everything is 
the fault of other Jews: Rahm Emanuel and David Axelrod, two 
American administration officials who are inciting President Barack 
Obama against their own people [sic]. We want our Jews in the 
administration to be blind to the settlements and deaf to the 
complaints of the Arabs. Obama has internalized what his 
predecessors refused to understand: the traditional supporters of 
the Israeli right are growing old, or losing their relevance.  They 
are giving way to younger, liberal forces that identify with Obama's 
values.  In the QbestQ case, Netanyahu's incitement against the 
Qself-hating JewsQ will do to them what his whispered comment in the 
ear of Rabbi Kaduri Qthose leftists are not JewsQ did to Israelis a 
decade ago -- it turned them against him. 
 
VII.  QIsraelQs New National Consensus 
 
 
The Director of the Interdisciplinary Center's Global Research in 
International Affairs Center, columnist Barry Rubin, wrote in the 
conservative, independent Jerusalem Post (7/20): QIf Israel gets 
what it requires -- and what successful peace requires --- [i.e. 
strong security and diplomatic guarantees] it will accept a 
two-state solution, [and] a Palestinian Arab Muslim state (the 
Palestinian Authority's own definition) alongside a Jewish state, 
living in peace.  Part of the new thinking is to understand that 
precise borders and East Jerusalem's status, while important, are 
secondary to these basic issues.  If those principles are resolved, 
all else can follow.  This new posture is not one of desperately 
asserting Israel's yearning for peace but rather saying: We're 
serious, we're ready, we're not suckers but we're not unreasonable 
either.  We want peace on real terms, not just more unilateral 
concessions and higher risk without reward.  Not experimenting with 
our survival to please others.  Not some illusory celebration of a 
two-state solution for a week and then watching it produce another 
century of violence. 
VIII.  QA Pause for Serious Self-Reflection 
 
Jonathan S. Tobin, executive director of Commentary magazine, wrote 
in The Jerusalem Post (7/20): QWhen U.S. President Barack Obama met 
with 15 representatives of American Jewish organizations on July 13, 
HaQaretz reported that he told them that he wanted to help Israel 
achieve peace but that if they were to benefit from his 
well-intentioned counsel, Israelis must Qengage in serious 
self-reflection.Q  The breathtaking condescension toward the Jewish 
state that this remark betrays, as well as the implicit dismissal of 
the last 16 years of Middle East history, says a lot about Obama and 
the direction in which American foreign policy is heading.  The fact 
that Israel has already gone through several periods of serious 
self-reflection and made costly sacrifices in terms not only of 
territory but in blood has no significance for the President. 
Jewish Democrats don't have to jump to the Republicans. If, as 
[Professor Alan] Dershowitz avows, pro-Israel Democrats have 
influence on the administration, then let them use it before things 
get even worse. Had a Republican done and said the same things that 
Obama has in the last six months who can doubt that he and other 
Democrats would be demanding that Jewish Republicans repudiate their 
party's leader?  The question remains what will be the tipping point 
for Jewish Democrats at which it will be impossible for them to go 
on pretending that they did not elect the most hostile president to 
Israel since the first George Bush?  If the current trend continues 
without a strong negative reaction from Jewish Democrats who raised 
money for Obama and voted for him, then we are entitled to ask why 
they are either silent or rationalizing a policy that they know is 
wrong. 
 
CUNNINGHAM